Atheists Renew Attack on Church Form 990 Exemption

The Freedom From Religion Foundation (FFRF) is back in court to challenge another longstanding exemption in the U.S. tax code for churches.

This time, the atheist organization is targeting the church exemption to filing the Form 990, an annual information return which most public charities are required to file each year with the Internal Revenue Service and make available for public inspection. The Internal Revenue Code has never required churches to file such a form given concerns over preserving the proper degree of separation of church and state, with the current exception for churches in Section 6033(a)(1)(3).

FFRF attempted a similar challenge to the Form 990 church exemption several years ago, only to have its case dismissed in 2014 for lack of standing. Shortly thereafter, FFRF formed a separate humanitarian charity, Nonbelief Relief. Since its inception, Nonbelief Relief has intentionally failed to file the Form 990 for three consecutive years so that its tax-exempt status would be revoked by the IRS in an attempt to gain standing.

In its complaint filed in the U.S. District Court for the District of Columbia, Nonbelief Relief argues the Form 990 exemption violates the First Amendment’s Establishment Clause and the organization’s Equal Protection rights. It asks the court to declare the exemption unconstitutional and issue an injunction to prevent the IRS from exempting churches from filing the Form 990 in the future.

The Commission on Accountability and Policy for Religious Organizations was formed in 2010 in response to a request for input from Senator Charles Grassley on various tax policy issues. In its report issued in 2012, the Commission recommended that Congress “never pass legislation requiring churches to file Form 990 or any similar information return or form with the federal government.” The Commission report continued, “To require such a filing would not only place a substantial and unnecessary burden on churches and the government, it would also raise significant constitutional concerns.”

While ECFA believes that attempts to require churches to file the Form 990 should be disregarded, ECFA requires its certified churches to provide a copy of their annual financial statements to anyone upon request.

ECFA will continue to monitor the case and report on relevant updates in our News section.